Music Ally’s Post

🚨 Music Publishers vs. Spotify: The Battle Intensifies 🚨 The National Music Publishers Association (NMPA) is calling on Congress to change royalty laws, arguing they currently favour tech giants like Spotify. This follows Spotify's controversial move to bundle audiobooks with premium music, reducing songwriter royalties. The Mechanical Licensing Collective has even taken legal action against Spotify. Here’s all the important information at a glance: → NMPA's Proposal: NMPA wants publishers to opt out of the blanket license for more market freedom. → Spotify's Bundle: The new bundle could reduce Spotify's payments to songwriters by $150 million in 2024. → Legal Actions: NMPA sent a cease-and-desist letter to Spotify; the Mechanical Licensing Collective also sued Spotify. → Songwriters' Concerns: Songwriters support NMPA but seek more details on the proposal. → Spotify's Response: Spotify claims the cease-and-desist is misleading and deflects from previous agreements. They emphasise bundles were part of the 2022 settlement and expect to pay even more to publishers in 2024. Songwriters, already struggling in the streaming era, are rallying behind the NMPA, criticising Spotify's moves. Meanwhile, Spotify defends its position, citing past agreements. The tension highlights the ongoing struggle for fair compensation in the music industry. Researched by: Prisha Chhabra #MusicIndustry #Spotify #Royalties #Songwriters #NMPA #MusicPublishing #StreamingWars

𝗦𝗽𝗼𝘁𝗶𝗳𝘆 𝗪𝗶𝗻𝘀 𝗟𝗲𝗴𝗮𝗹 𝗕𝗮𝘁𝘁𝗹𝗲 𝗢𝘃𝗲𝗿 𝗥𝗼𝘆𝗮𝗹𝘁𝘆 𝗥𝗲𝗱𝘂𝗰𝘁𝗶𝗼𝗻 𝗧𝗵𝗿𝗼𝘂𝗴𝗵 𝗔𝘂𝗱𝗶𝗼𝗯𝗼𝗼𝗸 𝗔𝗱𝗱𝗶𝘁𝗶𝗼𝗻 A U.S. Federal Court has sided with streaming service Spotify in a dispute with the Mechanical Licensing Collective (MLC) over music royalty payments. The organization, representing the interests of songwriters and music publishers, accused Spotify of illegally reducing payments after adding audiobooks to the platform. In 2023, Spotify began offering its premium subscribers access to audiobooks without increasing subscription costs. This allowed the company to claim a lower "bundle" royalty rate, which, according to Billboard calculations, could save the service approximately $150 million per year. MLC argued that this decision was "unilateral and illegal," and that adding audiobooks was merely a pretext for reducing payments to musicians. However, Judge Analisa Torres disagreed with this position. "Audiobook streaming is a separate product with real value," the judge stated in her decision. She noted that even if only a portion of Spotify's millions of subscribers use this feature, the ability to listen to 15 hours of audiobooks per month cannot be considered merely a symbolic service. MLC representatives called Spotify's actions "unprecedented" and are considering filing an appeal. In turn, Spotify stated that "bundle offerings play an important role in expanding interest in paid music and growing revenue for the music industry." This court decision could become an important precedent for the music industry, showing how streaming services can legally optimize their royalty payment expenses through service diversification.

The MLC is On The Case!! Dear Member, We are writing to inform you that today, Thursday, May 16, 2024, The MLC brought a legal action against Spotify USA Inc. (Spotify) to recover blanket royalties due under the compulsory mechanical blanket license that Spotify obtained to enable its consumer music streaming platform. A copy of the complaint can be found here. Why did The MLC bring this action? Beginning in March 2024, Spotify asserted that its Premium Individual, Duo and Family subscription streaming plans were now Bundled Subscription Offerings because those plans included access to audiobooks. Applying the rate formula applicable to Bundled Subscription Offerings results in a reduction of the Service Provider Revenue that Spotify reports, which results in an underpayment of royalties. The MLC believes that Spotify’s position does not comply with applicable law and regulations. The MLC has statutory authority to address Spotify’s noncompliance with its royalty payment obligations. The MLC is taking legal action to enforce these obligations and ensure that Spotify pays all royalties due from its use of songs on Premium plans. Why are legal efforts important? As the sole entity authorized to use legal efforts to enforce blanket license terms, it is The MLC’s legal responsibility to take action on behalf of our Members when we believe usage reporting and royalty payments are incorrect. What happens next? We have filed this legal action in the United States District Court for the Southern District of New York. Spotify will have an opportunity to respond, after which the court will set and manage a case schedule for the proceeding. Once the matter is resolved, we will give Members an explanation of the outcome and details on any royalty adjustments.

“The Mechanical Licensing Collective (The MLC) has filed a lawsuit against Spotify in the United States for allegedly underpaying royalties to songwriters and publishers. The lawsuit, filed in the United States District Court for the Southern District of New York on Thursday (May 16), stems from Spotify’s decision at the beginning of March to reclassify its Premium Individual, Duo, and Family subscription streaming plans as Bundled Subscription Offerings because those plans now offer access to audiobooks. Under a 2022 legal settlement – aka Phonorecords IV – music publishers and music streaming services agreed that ‘bundle’ services in the States are permitted to pay a lower mechanical royalty rate to publishers and songwriters than standalone music subscription services. The MLC argues that by applying the rate formula applicable to Bundles to its Premium subscriptions, Spotify is underpaying royalties due to songwriters and publishers, and that Spotify’s position does not comply with the law.” #Spotify #MLC #Streaming #Songwriters #StreamingRoyalties #Royalties #MusicTracks #MusicStreams #Music #MusicBusiness #Musica #MusicIndustry #Musique #Musik #MusicBiz #CompulsoryLicense #US #MusicPublishing #NMPA #StreamingServices #StreamingMedia #UniversalMusic #SonyMusic #UniversalMusicGroup #WarnerChappell #Audiobooks

#Spotify is not alone in capitalizing on #bundling, with #YouTubeMusic’s 73% of its estimated subscribers using plans classified as bundles for royalty purposes. This data is part of #DMNPro's latest report, which highlights the growing significance of bundling in the on-demand streaming arena. Currently, almost all Spotify #subscriptions (roughly 98%) are technically bundles in the U.S., with the possibility of a #music-only plan convincing customers to forgo #audiobooks in favor of small monthly savings. Spotify is on track to pay a lot less to #publishers in 2024 and, barring any changes, through 2027. Its main competitors, including Apple Music, #AmazonMusic, and YouTube Music, also rely heavily on multi-product packages. As of February 2024, YouTube Music had about 5.05 million #accounts #classified and paying mechanicals as bundles, representing most of its stateside subscriptions. The National Music Publishers' Association is negotiating Phonorecords V, with publishers poised to miss out on hundreds of millions of dollars solely due to Spotify's reclassifications.

The Mechanical Licensing Collective (The MLC) has filed a lawsuit against Spotify in the United States for allegedly underpaying royalties to songwriters and publishers.The lawsuit, filed in the United States District Court for the Southern District of New York on Thursday (May 16), stems from Spotify’s decision at the beginning of March to reclassify its Premium Individual, Duo, and Family subscription streaming plans as Bundled Subscription Offerings because those plans now offer access to audiobooks.  Under a 2022 legal settlement – aka Phonorecords IV – music publishers and music streaming services agreed that ‘bundle’ services in the States are permitted to pay a lower mechanical royalty rate to publishers and songwriters than standalone music subscription services.The MLC argues that by applying the rate formula applicable to Bundles to its Premium subscriptions, Spotify is underpaying royalties due to songwriters and publishers, and that Spotify’s position does not comply with the law. The MLC is the non-profit organization designated by the US Copyright Office to ensure that music streaming services like Spotify pay the mechanical royalties they owe to songwriters and music publishers. 

🎶 Spotify’s Bundling Controversy: A Blow to Songwriters' Earnings 🎶 Spotify's recent move has sparked controversy and a legal battle that every artist should be aware of. The company is seeking to dismiss a lawsuit filed by the Mechanical Licensing Collective (MLC), which alleges that Spotify is cutting pay rates for songwriters by bundling its Premium music service with audiobooks. Here’s how they tried to be slick: By offering this bundle, Spotify classified it in a way that allowed them to reduce the royalties owed to songwriters, effectively shortchanging the very creators who fuel their platform. It’s a classic case of a major corporation prioritizing its bottom line at the expense of the artists who make their service possible. The MLC’s lawsuit argues that this bundling strategy not only undermines fair compensation but also sets a dangerous precedent for how artists are valued in the digital age. Spotify’s attempt to brush this off in court speaks volumes about their priorities. For artists, this situation is a stark reminder of the ongoing challenges in securing fair pay in the streaming era. It’s not just about making music anymore; it’s about ensuring that the platforms distributing that music respect and properly compensate the talent behind it. The fight isn’t just about this one bundle deal—it’s about protecting the rights and earnings of songwriters across the board. As this case unfolds, it will be crucial for artists and industry professionals alike to stay informed and vocal about the need for fair treatment in the digital marketplace. -Jay #Spotify #MusicIndustry #FairPay #StreamingWars #SongwritersRights #DigitalMusic #MLCLawsuit #ArtistAdvocacy #MusicCreators #Royalties

Spotify & National Music Publishers' Association are fighting. As the drama over Spotify's new music/ audiobook bundling policy continues, now the NMPA is accusing Spotify of not properly licensing lyric, video, & podcast content. The NMPA didn't specify any particular piece of content that was in violation. Spotify's response was pretty defiant. What do I think? The two sides signed Phonograph IV (aka the Copyright Royalty Board IV decision) in 2022. This agreement governs publishing rates for 2023 - 2027. Both companies touted it as a good deal at the time. Since then, there has been no evidence Spotify is skirting publishing royalties for their auxiliary content. David Israelite, who leads the NMPA, is an effective leader. He's been a strong advocate for songwriters (something I witnessed when I was at Pandora and we went through the same battles). But it seems this is a public negotiation tactic, and not a real gripe. If the NMPA files an actual lawsuit they'll have to give more detail. Until then, I would consider this talking #$%& in the press to gain public opinion. #musicindustry #musicbusiness #spotify #publising